Fortescue Metals Group more than doubled its profit in the 2017 financial year as iron ore prices surged.
The company reported a 112 per cent rise in profits to $US2.1 billion ($2.65 billion), which reflected improved iron ore prices, as well a sustained focus on productivity and efficiency initiatives that saw cash costs fall to $US12.82 per wet metric tonne (wmt).
Fortescue’s cash position at the end of the financial year was $US1.8 billion, with net gearing reduced to 21 per cent following the repayment of $US2.7 billion in debt and refinancing of an additional $US1.5 billion.
Chief executive officer Nev Power said the whole Fortescue team delivered outstanding results against the company’s key safety, production and cost targets.
“Safety improved by 33 per cent compared to the previous year, while costs improved by 17 per cent and we achieved a record low C1 operating cost of $US12.16/wmt in the June quarter,” Power said.
“Fortescue has continued to generate excellent cashflows allowing further repayment of debt, strengthening of our balance sheet and increasing returns to our shareholders.
“Out strong operating performance and financial outlook has led to the board declaring a final fully franked dividend of 25 cents per share, increasing total FY17 dividends to 45 cents per share, a 52 per cent pay-out of net profit after tax.”
Fortescue reported a 19 per cent increase in revenue to $US8.45 billion as the average Platts 62 CFR iron ore price rose to $US69.53 per dry metric tonne (dmt), up from $US51.37/dmt a year earlier.
The company’s guidance for fiscal 2018 is to ship 170 million tonnes of iron ore.